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> If the pandemic lasts longer than 6 months, which is quite likely, many high-cost oil producers might not survive. Some would argue this could lead to shortag
by ardy42 7y ago
> If the pandemic lasts longer than 6 months, which is quite likely, many high-cost oil producers might not survive. Some would argue this could lead to shortage and a much higher price later on, but long-term oil demand could also be affected.
Even if they all declared bankruptcy, their infrastructure would still be there. I'd imagine someone would buy it and bring it back online if/when prices recover.
- nopinsight 7y agoI agree. It depends on long-term demand change, if any. New investors might be quite reluctant for a while regardless.
- marcosdumay 7y agoDepreciation exists, and for mining investments, it's quite fast. Without extra investments, in 3 years most of that infrastructure won't be there anymore.
- fragmede 7y agoFascinating. Is crude oil extra corrosive or is it something in the environment? Ocean salt water is highly corrosive but then what about equipment on land? Is there something that could be done to make an idled investment last longer?
- marcosdumay 7y agoNot so much corrosive as it is finite. A wheel will gather some oil, and then it's gone, and you need to dig another one.